Pakistan is the World's 5th Largest Motorcycles Market
Pakistan is the 5th largest motorcycle market in the world after China, India, Indonesia and Vietnam. With 7,500 new motorcycles being sold everyday, Pakistan is also the among the world's fastest growing two-wheeler markets. Passenger car and motorcycle sales in Pakistan are both soaring at rates of over 20% a year.
Auto Demand Soaring:
Nearly 2.3 million motorcycles have rolled off the factories in Pakistan in the last 10 months. The production of motorcycles jumped 22.34 percent in the first four months of fiscal year 2017-18 (FY18), over the corresponding period of in FY17, according to the latest data from Pakistan Bureau of Statistics (PBS) as reported by the media.
Pakistan automobile market is also expanding along with the motorcycle market. Sales of passenger cars soared 20.4% to 103,432 units in the first half of the current fiscal year of 2017/18, recently released official data shows. Car sales were 85,901 in the same period of last fiscal year, according to Pakistan Automotive Manufacturers Association (PAMA).
Durable Goods Ownership:
Ownership of consumer durables like computers, home appliances and vehicles is often seen as an important indicator of the size and health of the middle classes in emerging economies. Examples of periodic household surveys used by researchers to measure such data include NSS (National Sampling Survey) in India and PSLM (Pakistan Social and Living Standards Measurement) in Pakistan.
Pakistan's Trillion Dollar Economy:
Pakistan is now the world's third fastest growing economy among the world's top 25 economies with PPP GDP of over one trillion US dollars, according to the International Monetary Fund (IMF). IMF has recently raised the country's 2018 growth forecast to 5.6%.
Pakistan 3rd Fastest Among Top 25:
Spectator Index has ranked India first with 7.3% growth, followed by China (6.5%), Pakistan (5.6%), Indonesia (5.3%) and Turkey (3.7%) among the world's 25 largest economies in terms of PPP GDP.
Earlier in October 2017, the International Monetary Fund (IMF) forecast Pakistan's economy to grow at 6.3% CAGR over 2017-2022.
India-Pakistan Comparison:
Dr. Jawaid Abdul Ghani, a professor at Karachi School of Business Leadership, has recently analyzed household surveys in India and Pakistan to discover the following:
1. As of 2015, car ownership in both India and Pakistan is about the same at 6% of households owning a car. However, 41% of Pakistani household own motorcycles, several points higher than India's 32%.
2. 12% of Pakistani households own a computer, slightly higher than 11% in India.
3. Higher percentage of Pakistani households own appliances such as refrigerators (Pakistan 47%, India 33%), washing machines (Pakistan 48%, India 15%) and fans (Pakistan 91%, India 83%).
4. 71% of Indian households own televisions versus 62% in Pakistan.
Growth over Time:
Dr. Abdul Ghani has also analyzed household data to show that the percentage of Pakistani households owning washing machines has doubled while car and refrigerator ownership has tripled and motorcycle ownership jumped 6-fold from 2001 to 2014.
Rapid Income Growth:
Rising ownership of durables in Pakistan has been driven by significant reduction in poverty and growth of household incomes, according to Dr. Abdul Ghani's research. Percentage of households with per capita income of under $2 per day per person has plummeted from 57% in 2001 to 7% in 2014. At the same time, the percentage of households earning $2 to $10 per day per person has soared from 42% of households in 2001 to 87% of households in 2014. The percentage of those earning over $10 per day per person has jumped 7-fold from 1% of households in 2001 to 7% of households in 2014.
Pakistani Middle Class:
Only 5% of Pakistanis in $2-$4 per day per person income group have college degrees. But 20% of those in $4-$10 have college degrees, according to the survey results.
Credit Suisse Income and Wealth Data:
Average Pakistani adult is 20% richer than an average Indian adult and the median wealth of a Pakistani adult is 120% higher than that of his or her Indian counterpart, according to Credit Suisse Wealth Report 2016. Average household wealth in Pakistan has grown 2.1% while it has declined 0.8% in India since the end of last year.
GDP Estimates Using Household Survey Data:
Pakistan's GDP calculated from consumption data in PSLM is significantly higher than the government estimates based on production data. The reverse is true of Indian GDP.
M. Ali Kemal and Ahmed Waqar Qasim, economists at Pakistan Institute of Development Economics (PIDE), explored several published different approaches for sizing Pakistan's underground economy and settled on a combination of PSLM (Pakistan Social and Living Standards Measurement) consumption data and mis-invoicing of exports and imports to conclude that the country's "informal economy was 91% of the formal economy in 2007-08".
Prominent Indian economists Abhijit V Banerjee, Pranab Bardhan, Rohini Somanathan and TN Srinivasan teaching at MIT, UC Berkeley, Yale University and Delhi School of Economics believe that India's GDP estimate based on household survey (National Sampling Service or NSS) data is about half of what the Indian government officially reports as India's GDP.
Here's a quote from French economist Thomas Piketty's book "Capital in the Twenty-First Century" explaining his skepticism of production-based official GDP figures of India and China:
"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (household have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data."
Who is Dr. Jawaid Abdul Ghani?
The PSLM household data cited in this blog post is taken from a recent presentation made by Dr. Jawaid Abdul Ghani at the Karachi School of Business and Leadership (KSBL) where he teaches. KSBL has been established in collaboration with Cambridge University's Judge Business School. Prior to his current faculty position, Dr. Abdul Ghani taught at MIT's Sloane School of Management and Lahore University of Management Sciences (LUMS). He has a computer science degree from MIT and an MBA from Wharton Business School.
Summary:
Pakistan is the 5th largest motorcycle market in the world after China, India, Indonesia and Vietnam. With 7,500 new motorcycles being sold everyday, Pakistan is also the among the world's fastest growing two-wheeler markets. Passenger car and motorcycles sales in Pakistan are both soaring at rates of over 20% a year. Pakistan has managed to significantly reduce poverty and rapidly grow its middle class since 2001. The country now boasts the world's third fastest growing economy among the world's top 25 economies with PPP GDP of over one trillion US dollars, according to the International Monetary Fund (IMF). IMF has recently raised the country's 2018 growth forecast to 5.6%. spite of major political, security and economic challenges. The foundation for the rise of the middle class was laid on President Musharraf's watch by his government's decisions to invest in education and infrastructure projects that led to the expansion of both human and financial capital. My hope is that the continued improvement in security situation and implementation of China-Pakistan Economic Corridor (CPEC) related projects will bring in higher long-term investments and accelerate Pakistan's progress toward prosperity for all of its citizens.
Related Links:
Haq's Musings
Credit Suisse Wealth Report 2016
Pakistan's Trillion Dollar Economy Among World's Fastest Growing
Pakistan: A Majority Middle Class Country
Karachi School of Business and Leadership
State Bank: Pakistan's Actual GDP Higher Than Officially Reported
College Enrollment in Pakistan
Musharraf Accelerated Development of Pakistan's Human and Financial Capital
China-Pakistan Economic Corridor
Auto Demand Soaring:
Nearly 2.3 million motorcycles have rolled off the factories in Pakistan in the last 10 months. The production of motorcycles jumped 22.34 percent in the first four months of fiscal year 2017-18 (FY18), over the corresponding period of in FY17, according to the latest data from Pakistan Bureau of Statistics (PBS) as reported by the media.
Pakistan automobile market is also expanding along with the motorcycle market. Sales of passenger cars soared 20.4% to 103,432 units in the first half of the current fiscal year of 2017/18, recently released official data shows. Car sales were 85,901 in the same period of last fiscal year, according to Pakistan Automotive Manufacturers Association (PAMA).
Durable Goods Ownership:
Ownership of consumer durables like computers, home appliances and vehicles is often seen as an important indicator of the size and health of the middle classes in emerging economies. Examples of periodic household surveys used by researchers to measure such data include NSS (National Sampling Survey) in India and PSLM (Pakistan Social and Living Standards Measurement) in Pakistan.
Durables Ownership in India and Pakistan. Source: KSBL |
Pakistan is now the world's third fastest growing economy among the world's top 25 economies with PPP GDP of over one trillion US dollars, according to the International Monetary Fund (IMF). IMF has recently raised the country's 2018 growth forecast to 5.6%.
Courtesy: Ashraf Hameedi, Highforest Capital |
Spectator Index has ranked India first with 7.3% growth, followed by China (6.5%), Pakistan (5.6%), Indonesia (5.3%) and Turkey (3.7%) among the world's 25 largest economies in terms of PPP GDP.
Earlier in October 2017, the International Monetary Fund (IMF) forecast Pakistan's economy to grow at 6.3% CAGR over 2017-2022.
India-Pakistan Comparison:
Dr. Jawaid Abdul Ghani, a professor at Karachi School of Business Leadership, has recently analyzed household surveys in India and Pakistan to discover the following:
1. As of 2015, car ownership in both India and Pakistan is about the same at 6% of households owning a car. However, 41% of Pakistani household own motorcycles, several points higher than India's 32%.
2. 12% of Pakistani households own a computer, slightly higher than 11% in India.
3. Higher percentage of Pakistani households own appliances such as refrigerators (Pakistan 47%, India 33%), washing machines (Pakistan 48%, India 15%) and fans (Pakistan 91%, India 83%).
4. 71% of Indian households own televisions versus 62% in Pakistan.
Durables Ownership Growth in Pakistan. Source: KSBL |
Dr. Abdul Ghani has also analyzed household data to show that the percentage of Pakistani households owning washing machines has doubled while car and refrigerator ownership has tripled and motorcycle ownership jumped 6-fold from 2001 to 2014.
Income/Consumption Growth in Pakistan. Source: KSBL |
Rapid Income Growth:
Rising ownership of durables in Pakistan has been driven by significant reduction in poverty and growth of household incomes, according to Dr. Abdul Ghani's research. Percentage of households with per capita income of under $2 per day per person has plummeted from 57% in 2001 to 7% in 2014. At the same time, the percentage of households earning $2 to $10 per day per person has soared from 42% of households in 2001 to 87% of households in 2014. The percentage of those earning over $10 per day per person has jumped 7-fold from 1% of households in 2001 to 7% of households in 2014.
Pakistani Middle Class:
Only 5% of Pakistanis in $2-$4 per day per person income group have college degrees. But 20% of those in $4-$10 have college degrees, according to the survey results.
Pakistan Middle Class Profile. Source: KSBL |
Credit Suisse Income and Wealth Data:
Average Pakistani adult is 20% richer than an average Indian adult and the median wealth of a Pakistani adult is 120% higher than that of his or her Indian counterpart, according to Credit Suisse Wealth Report 2016. Average household wealth in Pakistan has grown 2.1% while it has declined 0.8% in India since the end of last year.
Median wealth data indicates that 50% of Pakistanis own more than $1,180 per adult which is 120% more than the $608 per adult owned by 50% of Indians.
GDP Estimates Using Household Survey Data:
Pakistan's GDP calculated from consumption data in PSLM is significantly higher than the government estimates based on production data. The reverse is true of Indian GDP.
M. Ali Kemal and Ahmed Waqar Qasim, economists at Pakistan Institute of Development Economics (PIDE), explored several published different approaches for sizing Pakistan's underground economy and settled on a combination of PSLM (Pakistan Social and Living Standards Measurement) consumption data and mis-invoicing of exports and imports to conclude that the country's "informal economy was 91% of the formal economy in 2007-08".
Prominent Indian economists Abhijit V Banerjee, Pranab Bardhan, Rohini Somanathan and TN Srinivasan teaching at MIT, UC Berkeley, Yale University and Delhi School of Economics believe that India's GDP estimate based on household survey (National Sampling Service or NSS) data is about half of what the Indian government officially reports as India's GDP.
Here's a quote from French economist Thomas Piketty's book "Capital in the Twenty-First Century" explaining his skepticism of production-based official GDP figures of India and China:
"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (household have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data."
Who is Dr. Jawaid Abdul Ghani?
The PSLM household data cited in this blog post is taken from a recent presentation made by Dr. Jawaid Abdul Ghani at the Karachi School of Business and Leadership (KSBL) where he teaches. KSBL has been established in collaboration with Cambridge University's Judge Business School. Prior to his current faculty position, Dr. Abdul Ghani taught at MIT's Sloane School of Management and Lahore University of Management Sciences (LUMS). He has a computer science degree from MIT and an MBA from Wharton Business School.
Summary:
Pakistan is the 5th largest motorcycle market in the world after China, India, Indonesia and Vietnam. With 7,500 new motorcycles being sold everyday, Pakistan is also the among the world's fastest growing two-wheeler markets. Passenger car and motorcycles sales in Pakistan are both soaring at rates of over 20% a year. Pakistan has managed to significantly reduce poverty and rapidly grow its middle class since 2001. The country now boasts the world's third fastest growing economy among the world's top 25 economies with PPP GDP of over one trillion US dollars, according to the International Monetary Fund (IMF). IMF has recently raised the country's 2018 growth forecast to 5.6%. spite of major political, security and economic challenges. The foundation for the rise of the middle class was laid on President Musharraf's watch by his government's decisions to invest in education and infrastructure projects that led to the expansion of both human and financial capital. My hope is that the continued improvement in security situation and implementation of China-Pakistan Economic Corridor (CPEC) related projects will bring in higher long-term investments and accelerate Pakistan's progress toward prosperity for all of its citizens.
Related Links:
Haq's Musings
Credit Suisse Wealth Report 2016
Pakistan's Trillion Dollar Economy Among World's Fastest Growing
Pakistan: A Majority Middle Class Country
Karachi School of Business and Leadership
State Bank: Pakistan's Actual GDP Higher Than Officially Reported
College Enrollment in Pakistan
Musharraf Accelerated Development of Pakistan's Human and Financial Capital
China-Pakistan Economic Corridor
Comments
Businesses' focus shifts from bombs and kidnappings to taxes and policy. #Taliban #TTP #terrorism #India #Karachi #Rangers
https://asia.nikkei.com/Politics-Economy/Economy/Pakistan-keeps-terrorists-on-the-run-and-economy-on-a-roll
KARACHI -- Terrorism, corruption, misrule: Negative perceptions have dogged Pakistan for years. But thanks to sweeping operations by the army and a powerful paramilitary force, those perceptions may be becoming outdated, and businesses are taking notice.
In Karachi, the country's largest city, motorcycles and elaborately decorated buses weave down dusty roads between colonial-era buildings. Less than a decade ago, these were truly mean streets. "Between 2010 and 2012, we saw one or two terrorist attacks every month and one or two targeted killings and kidnappings for ransom every day," recalled Army Maj. Gen. Mohammad Saeed. "There were 17 no-go areas which the police could not touch in Karachi."
At the time, even major hotels had occupancy rates of just 10% to 15%. Hundreds of shops and other businesses closed down.
Then the Rangers began to clean up.
The Pakistan Rangers, a paramilitary law enforcement organization overseen by the military and the Interior Ministry, set out to tackle the violence head-on. In 2013, the Rangers Sindh -- which operate in Sindh Province, including Karachi -- mobilized 15,000 troops. The provincial legislature granted them broad powers to search homes and make arrests, enabling them to quickly turn the tide.
In 2017, there were zero bombings and only five kidnappings, according to Saeed, who serves as director general of the Rangers Sindh. This is no small feat in a city with a swelling population of 17 million -- perhaps even 20 million if migrants from rural areas are factored in. "We destroyed all of the terrorists' pockets," he said, adding that hotel occupancy rates are over 90%.
The story is similar in Pakistan's other major cities. And as the Rangers have made headway, business sentiment has improved and growth has picked up.
Pakistan's real gross domestic product grew 5.3% in the fiscal year through June 2017, the quickest pace in 10 years. The central bank projects the growth rate for this fiscal year will approach 6%. Inflation has stabilized and exports are brisk.
"Unfortunately, Pakistan is a victim of negative perception," said Arif Habib, who heads the conglomerate Arif Habib Group. "There is a lot of difference between perception and reality."
But the rest of the world seems to be catching on to the positive changes, too: Foreign direct investment is estimated to reach a record $5 billion or so in the current fiscal year, up from $3.43 billion last year.
Last June, in a survey by the Overseas Investors Chamber of Commerce & Industry, 89% of respondents said security concerns in Karachi had receded since 2013.
The OICCI is made up of 193 companies, mainly major foreign businesses in Pakistan. Each year, it surveys the members about factors that are hampering investment in Pakistan. "The top answer in 2015 was 'security, law and order,' but it fell to third place in 2017," said OICCI Secretary-General Abdul Aleem, who served as the chief executive of a state-run company. "It was overtaken by 'tax burden' and 'policy implementation.'"
https://dailytimes.com.pk/184644/economy-maintaining-growth-momentum-despite-external-headwinds-sbp/
KARACHI: The State Bank of Pakistan (SBP) Friday said the preliminary data on key macroeconomic indicators suggest that growth momentum remained in the first quarter of the current fiscal year.
The Central Bank mentioned in its first quarterly report for FY18 that several coincident indicators point to a further strengthening of aggregate supply and demand in the economy.
According to the report, with the exception of cotton, other major kharif crops achieved or surpassed the FY18 targets. This improvement is supported by sufficient water availability, healthy fertilizer off take and an encouraging increase in agricultural credit disbursements. The large-scale manufacturing also experienced a 10 percent high growth during Q1-FY18 – the highest quarterly growth since FY09.
The performance was encouraging as all sectors, barring fertilizer, contributed positively. This broad based\ growth can be attributed to better energy availability, improved security situation, and rising consumer demand on the back of higher purchasing power and access to affordable credit facilities. The healthy performance of commodity producing sectors had a positive impact on the services sector as well, it added.
The Report highlighted that timely policy support, favorable cyclical movements, low and stable inflation along with growing confidence triggered an uptick in the private sector credit. In particular, the fixed investment loans expanded for the twelfth consecutive quarter in Q1-FY18.
The Report also observed the noteworthy rebound in FBR revenues on the back of increased economic activity. New infrastructure projects, surge in imports, higher consumption of consumer durables, and increased prices and consumption of POL products significantly contributed to both direct and indirect taxes. Notwithstanding this performance, the Report emphasized on the need for more concerted efforts aimed at expanding the tax base.
It also highlighted that the recent significant gains in export growth and foreign direct investment are welcome developments. However, these gains were not enough to contain the overall balance of payments deficit. On the back of an expanding economy, import payments far exceeded the aforementioned positives and the external sector remained under pressure. The widening of current account deficit along with an increase in economic activity is a recurring phenomenon for Pakistan, and one that has the tendency of disrupting growth cycles. There is, hence, an urgent need to find innovative policy mixes, avenues for raising foreign exchange earnings, and realigning policies favoring export growth.
In brief, the first quarter developments show that Pakistan’s economy is well poised to continue on its growth momentum for FY18. However, in order to maintain this virtuous equilibrium of high growth and low inflation in the medium- and long-term, the Report underlines the need to address long-standing structural reforms in the fiscal and external sectors.
https://www.brecorder.com/2018/07/10/427589/third-times-the-charm/
Cars are getting pricier again. For the third time since December when the currency first started to take its downward spiral, local automakers have raised prices. Whereas Suzuki raised prices by as much as Rs30,000, Toyota raised prices between Rs50,000 to Rs1.9 million for some of its imported vehicles. Honda, on the other hand, raised prices by up to Rs100,000. The Rupee to US Dollar depreciation continued well into July – falling by nearly 15 percent since December. Against the Japanese Yen, the Rupee fell by 17 percent during this period.
The price-hikes have been associated to high costs of manufacturing – not only rising costs for Completely Knocked Down (CKD) kits; but also locally-manufactured auto parts. According to data reported by Pakistan Bureau of Statistics (PBS), cost of CKD imports for motorcars went up by 21 percent between July-May 2018 whereas sales during the period rose by 16 percent.
Existing OEMs and auto-part makers are still dependent on imported CKD kits, functional parts, and commodities like iron, steel, aluminum, plastic etc. which are mostly imported. In an interview with BR Research, the Chairman of PAAPAM, Iftikhar Ahmed shared his estimates for localization in the cars segment, putting Suzuki’s at more than 70 percent, Toyota more than 55 and Honda around 51 percent. On average, he believes localization should be around 60-61 percent for all the three OEMs.
This means, nearly 40 percent of the content is still of imported value.
BR Research’s own calculations suggest localization levels during FY17 for an average car manufactured in the country may be 51 percent – (read “The Fault in our Cars”, published Feb 6, 2018) – whereas share of imported content in car prices would be around 22 percent. The rest is sales tax and customs duties. If imports become expensive, tax collected is also higher. Moreover, for cars with strong demand like Wagon-R or the more sophisticated SUVs or cross-over SUVs like Toyota Fortuner or Honda BR-V, localization is not a lot. This means, OEMs have no choice but to raise prices to keep their margins intact.
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https://www.brecorder.com/2018/02/06/397319/the-fault-in-our-cars/
The sector has had three major Japanese car makers, who started off by producing 33,000 units back in 1996, growing to the peak of 176,000 units in 2007, and since laid low. Now the volumes are hitting 200,000 cars and are expected to go up with the culmination of the new auto policy with at least three more players entering the field (Read “The Year of Cars”, Jan 29, 2018).
There is no doubt that the three Original Equipment Manufacturers (OEMs) have invested in Pakistan. Recently, Indus Motors expanded capacity worth Rs4 billion. Honda invested Rs240million to expand its press and paint shops. The sector provides direct and indirect jobs to over 2 million people.
There is a large parts manufacturing industry that runs parallel to the primary industry. Technology transfer has also happened with the support of carmakers. Vendors have signed technical agreements with prominent counterparts abroad to increase capabilities. Indus Motors Chief, Ali Jamali told BR Research that Toyota in Pakistan buys 126 million parts from local vendors every day. Seems like a huge number! But let’s consider another huge number.
Import bill for Completely Knocked Down (CKD) kits has grown from $268 million in FY09 to $673 million in FY17, according to data retrieved from Pakistan Bureau of Statistics (PBS). That’s more than Completely Built Unit (CBU) imports. This means, the imported content to manufacture one unit of car, on average, has remained between $3,000 to $4,000 through the years. With such a huge import burden for manufacturing, have we truly substituted imports?
India’s back-series GDP (gross domestic product) data, released by the NITI Aayog just four months before the 2019 general elections, turns the basic laws of macroeconomics on their head.
Here’s one that is most intriguing. The data shows lower GDP growth during the UPA years, which is when the gross investment to GDP ratio was peaking at 38%. And conversely, it shows higher GDP figures during the four years of Modi-led NDA-II government, which is when the gross investment to GDP ratio was at its lowest, at 30.3%.
Economic theory has always held that higher investments lead to higher GDP. So how can GDP grow faster when the investment-to-GDP ratio has fallen?
Technically, the only circumstance in which this can happen is when the economy’s productivity or the ‘Incremental Capital Output Ratio’ (ICOR) improves equally dramatically. Simply put, it means the economy generates a lot more output for the same amount of capital employed. There is no sign of that happening during the Modi government’s four years in which productivity was in fact negatively impacted by the twin shocks of demonetisation and messy GST implementation. Besides this, much of the NDA-II period has also seen the largest quantum ever of unproductive assets locked up in the form of non-performing assets (NPAs). Banks are not lending because of unresolved bad loans. How can productivity surge in such circumstances?
Says Mahesh Vyas, CEO of the Centre for Monitoring Indian Economy, a reputed private data research firm, “The new GDP back series numbers show India to be a magical economy where when the investment ratio drops sharply, the economy accelerates sharply. During the period (2007-08 to 2010-11) when the investment to GDP ratio was peaking at average 37.4% the average GDP growth was 6.7%. And in the recent four years (2014-15 to 2017-18) when the investment ratio was down to 30.3% the economy was sailing at 7.2%. Is this productivity magic?” There is really no answer to this fundamental questIon.
Former head of the Central Statistics Office (CSO) and chairman of the National Statistical Commission, Pronab Sen, is known to have a great feel for data and has been one of India’s foremost economists and chief statisticians. Sen has been critical of the manner in which the back-series data was essentially released by NITI Aayog and not by the CSO alone, as has been the practice in the past. This is tantamount to politicising institutions which deal with national statistics.
That apart, Sen also agrees that the back-series data does not pass the basic smell test linked to ground realities. While better productivity can theoretically produce higher output with the same quantum of capital or labour, he argues that the period of 2005-2012 also saw a big communication revolution in India due to mobile penetration. Consequently, it would be difficult to argue lower productivity in the UPA era. The service sector overall – whether communications, banking, real estate or hotels – clearly boomed during the UPA period.
Significantly, average GDP growth has been lowered to 6.7% during the UPA period in the new series, from over 8% in the earlier series, largely based on adjusting the service sector output (which was the biggest contributor to GDP) to lower levels.
There are other basic common sense tests which the new series fails. For instance, UPA-era growth is supposed to be lower even though the country’s exports were booming at 20%-plus, bank credit to industry grew at over 20% and the corporate earnings of the top 1,100 companies grew at at over 20%.
“It is a bit ambitious target but it is possible to achieve this target due to the yearly growth in production as well as interest showed by different automobile companies from across the world especially from China which plans to invest in Pakistan,” he said while addressing Pakistan Automobile Industry Roundtable Seminar held at Pakistan Embassy, Beijing.
While addressing the participants, the ambassador said that a number of the Chinese companies are already in Pakistan in automobile manufacturing sector while up to 10 new companies have shown interest to invest in Pakistan and are in the process of having joint ventures with their local partners in the private sector. He informed that the government is formulating a new and very attractive automobile sector policy which will be announced soon, adding, more incentives and concessions in taxes are likely to be offered in the new policy.
Ambassador Haque said that automobile companies including manufacturers of energy vehicles from China will be invited to set up their plants both in the Greenfield and Brownfield sectors.
Giving details about the automobile sector in Pakistan, he said that the automobile is the fastest growing sector in Pakistan because of the large demand in view of the population which is close to 220 million people. In the past, the Japanese manufacturers had set up their production units but in recent times the Chinese automobile companies also started looking at the opportunities available in Pakistan.
https://www.motorcyclesdata.com/2021/10/25/pakistan-motorcycles/
Motorcycles Market 2021 Trend
Pakistani two wheeler market is accelerating and recovering fast, following the lost reported in the 2020, when prolonged shutdown and lockdowns blocked the production and the commercial activities for a while.
This year the demand is back very fast and we can expect the market to be back on the pre covid track, when it was one of the fastest growing worldwide.
Sales speed up in the first half of this calendar year, when two and three wheeler sales have been 951.093, up a huge 66.8% vs the 2020 and +9.0% vs the 2019, hitting the new record as highest semester ever.
In the third quarter sales have been flat from the previous year. Consequently, Year to Date September sales were 1.4 million, up 37.5% vs the 2020 and 13.0% vs the 2019, running towards the second all-time level, just below the 2018 record.
The competitive arena is dominated by Honda with sales up 52.2%. It is followed by United Auto (+10.7%) and Road Prince (+6.0%), the best local brands.
Pakistani Market Heritage
Before 2004, nobody could have ever thought that Pakistan motorcycle industry would flourish at such an exorbitant scale. In those years the market volume was below 0.1 million annual units and two companies only (Atlas Honda and Dawood Yamaha) were operating in the market. Suzuki and Qingqi held minor shares.
Thanks to government open policy, new manufacturers entered the market backed by Chinese technology and the sector become crucial in sustaining Pakistan economic development. In the last 15 years, it has become the preferred solution for individual mobility.
The following factors played a vital role in this development:
Cheap but reliable technology from China.
Independent sourcing of engines technology from China and body parts from local vendors.
Assemblers of Japanese brands had to pay a big amount as royalty to their principals, while new assemblers are sourcing everything independently. It has reduced bike cost.
Overhead expenses are small as most of the companies operate in limited areas.
Financing/leasing facility is available at local level. This facilitated lower-income people to buy a bike despite limited resources.
In recent years, Pakistani motorcycles industry has been among the fastest in the World. Indeed, the milestone of 1 million units has been hit for the first time only in 2015 and now the market is already running towards the 2 million annual sales. Following the over 1.4 million sales achieved in 2017, the market further boomed in 2018, with a record of 1.9 million sales. up 6.6%, and scoring the All Time Record.
However, rupee depreciation together with tax increase and less cash available for credit, penalized the market since the end of 2018. Motorcycles’ price further increase, discouraging the demand and the market has taken a negative path.
@bilalgilani
Poverty picture based on World Bank data
Don't believe the gloom spreaders
If you have one foot in US , every day you try to justify your exit by dissing Pakistan
Facts belie your gloom story
Long way to go but Pakistan is progressing
https://twitter.com/bilalgilani/status/1496405609096351746?s=20&t=5RWyuRFkBRfeFG_Djqk90Q
(Graph shows poverty declining from 64% in 2001 to 40% in 2008 and 21.9% in 2018
https://irshadgul.com/nfhs-5-report-7-percent-of-households-in-india-own-a-car-goa-first-and-bihar-last-ig-news/
NFHS-5 report 7 Percent of households in India own a car, Goa first and Bihar last
New Delhi: According to the National Family Health Survey 2019-21 (NFHS-5) report, 7.5% of households in India own a car. This number has increased by 1.5% in the last 4 years. In 2018, the figure was 6%. In terms of states, Goa ranks first, Kerala second and undivided Jammu and Kashmir third. In Goa, 45.2% of households own a car. The figure is 24.2% in Kerala and 23.7% in Jammu and Kashmir.
In Himachal Pradesh 22.1% of households own a car, in Punjab the figure is 21.9% and in Nagaland it is 21.3%. In Sikkim, 20.9% of households own a car. The hill and northeastern states are at the forefront in this regard. 19.3% in Arunachal Pradesh, 17.0% in Manipur, 15.5% in Mizoram, 12.9% in Meghalaya and 8.1% in Assam own a car. In the hill states of Uttarakhand, after Jammu and Kashmir and Himachal, 12.7% of households own a car.
In the national capital Delhi, 19.4% of households own a car. In Haryana, 15.3% of households own a car. In Uttar Pradesh, the largest state in the country in terms of population, only 5.50% of households own a car. The fewest families in Bihar have their own car. Only 2.0 per cent of households in the state own a car. This is followed by the number of Odisha. In Odisha, 2.7% of households own a car.
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@indiainpixels
What percentage of households in India own a car in India? 🚙
https://twitter.com/indiainpixels/status/1525369535741984768?s=20&t=5xI6rnsyJWXg6N1SEexDMQ
https://www.pbs.gov.pk/sites/default/files//pslm/publications/pslm_district_2019-20/PSLM_2019_20_District_Level.pdf
HOUSEHOLD WITH: U R T
Computer 19 7 12
Internet 48 23 33
Mobile 96 91 93
PERCENTAGE OF THE POPULATION 10 YEARS AND OLDER WITH MOBILE OWNERSHIP
M F T
Pakistan 65 25 45
Urban 71 38 55
Rural 61 17 39
PERCENTAGE OF THE POPULATION 10 YEARS AND OLDER USED INTERNET IN LAST THREE
MONTHS
Pakistan 24 14 19
Urban 37 24 31
Rural 16 7 12
PERCENTAGE OF THE POPULATION 10 YEARS AND OLDER WITH ICT SKILLS
Copy Move 66 57 63
Copy Paste 54 52 53
Send Mail 51 44 48
Spread Sheet 31 20 27
Finding Downloading Software. 33 32 33
Presentation 25 16 21
Transferring Files 35 33 35
Programming 24 15 20
Social Media 46 41 45
Entertainment 60 58 59
Connecting Installing Devices 26 15 22
@RiteshEconomist
While domestic #demand is hampered by high taxes on both vehicles, fuels, motor insurance and repair and maintenance as well as traffic congestion that jack up the cost of owning #vehicles relatively stronger rupee is hurting #Exports, for instance, of 2W.
https://twitter.com/RiteshEconomist/status/1611901898642321409?s=20&t=FIhHrWvDf922ge89Kn5sKg
Two-wheeler sales stuttering, how long before it gets better?
After signs of recovery, two-wheeler sales slipped in December showing weakness in domestic demand as well as exports. Expectations are that improving rural demand will drive sales, albeit after a couple of quarters
https://www.moneycontrol.com/news/opinion/two-wheeler-sales-stuttering-how-long-before-it-gets-better-9814021.html
ighlights December saw leading two-wheeler firms report a sales drop both year-on-year and month-on-month Domestic demand is yet to grow beyond 2019 pre-pandemic levels Rural sentiment is turning positive but yet to translate into two-wheeler purchases Exports were hit due to devaluation in currencies of importing markets After a couple months of improvement, a weak December for two-wheeler (2W) sales is a setback for forecasts of recovery in 2023. This auto segment registered a marginal year-on-year (yoy) sales rise, while declining compared to the previous...